!"#$%#$& '( ) '( )* '( +, '( - '( ). '( )) AN INTRODUCTION TO INDOSTAR Path to Present 3 Credit Ratings 4 Global Expertise and Insight 5 Extensive Spectrum of Offerings 6 BOARD AND MANAGEMENT REPORTS Management Discussion and Analysis 24 Directors Report 30 FINANCIAL STATEMENTS Auditors Report 37 Balance Sheet 42 Statement of Proft and Loss 43 Cash Flow Statement 44 Notes 46 THEME STORIES Strengthening Relationships 8 Due Diligence 10 Execution Capabilities 12 Focus on Operational Excellence 16 Experienced Management 18 MESSAGE FROM THE MANAGING DIRECTOR & CEO PROFILES OF THE BOARD OF DIRECTORS AND CFO In a developing economy like India, the demand for credit is high. At IndoStar, we are in the process of establishing ourselves as an independent wholesale credit institution, leveraging global best practices. With an in-depth understanding of the credit market, we aim to emerge as an end-to-end funding solutions provider for emerging business enterprises. As a facilitator of credit, credibility forms the core of our business operations. Our credibility stems from our ability to innovate and deliver complex credit solutions, the implementation of robust credit practices and processes, sponsorships from reputed global fnancial institutions; and the accretion of intellectual capital. We also provide capital for highly specialised transactions, where the use of funds may be to acquire new assets or to build capacity. The aim is to facilitate new asset creation and unlock the value of existing assets. !" $%" &'(()**"+ *' *," -'./!*"%( /%'0*, '1 '2% 3*$4",'-+"%35 As the demand for credit grows, we will leverage on our global expertise and stakeholder perspective to be a participant in a progressive economy. 6%"+)* $.+ 6%"+)7)-)*8 9. ).*%'+2&*)'. *' :.+';*$% I ndoStar is committed to address the credit appetite in the Indian fnancial system. Its focus is on providing innovative, structured debt solutions to meet capital requirements for corporates across sectors. Fully integrated into the Indian fnancial system, the Company offers a wide spectrum of credit products. <=>9?:;? :> @ABCDA@ 9>< 96@:B> :.+';*$% 6$E)*$- F).$.&" G%)H$*" I)()*"+ J:.+';*$%K )3 $ >'.! L$.4)./ F).$.&)$- 6'(E$.8 J>LF6KM 3E'.3'%"+ 78 1).$.&)$- ).3*)*2*)'.3M 32&, $3 93,('%"M D'-+($. ;$&,3 $.+ NH"%3*'." 6$E)*$-M $('./ '*,"%35 6$E)*$-)3"+ 0)*, $. "O2)*8 7$3" '1 ! PQR 6%'%"M *," 6'(E$.8 &'((".&"+ 'E"%$*)'.3 1%'( 9E%)- STRR5 Since commencing its operations, IndoStar has completed over thirty transactions with a ! 1,400 Crore asset base, as of September 2012. !1,400 Crore asset base as of September 2012 S IndoStar Capital Finance Private Limited G9@A @B GUN;N>@ 9 323*$).$7-8 /%'0)./ ".*"%E%)3" .""+3 $ 3*%'./ 1'2.+$*)'.5 S ince inception, IndoStar has focused on the fundamentals. Building a team of experienced professionals, setting up a robust system of policies and processes, and ensuring a high-quality portfolio these objectives have been achieved during the frst year of operations. The benefts of these initiatives will accrue over the years to come. 9E%V RR IndoStar capitalised 1st deal closed <"&V RR Entire operations team in place, including credit origination and co-partici- pation. Senior team of 8 including management, overall business team of 12 W2.V RR 1st co-participation transaction closed W2-V RR 1st infrastructure loan disbursed W$.V RS Long-term Credit Rating obtained ?$%V RS 1st bank loan sanction received 1st money market issue 1st pure syndication transaction closed ?$8V RS Asset size crossed ! 1,000 Crore Annual Report 2011-12 X Corporate Overview Board and Management Reports Financial Statements 6UN<:@ U9@:>D; :.+';*$% )3 %$*"+ 78 6%"+)* 9.$-83)3 Y U"3"$%&, I)()*"+ J69UNK $.+ :6U9 I)()*"+5 @," 6'(E$.8 ".Z'83 99[ %$*)./ 1'% )*3 I'./ @"%( L'%%'0)./3 $.+ 9R\ %$*)./ 1'% )*3 ;,'%* @"%( L'%%'0)./3M 3)/.)18)./ *," ,)/, &%"+)* O2$-)*8 '1 :.+';*$%V3 -'$. 7''45 9. ).*%'+2&*)'. *' :.+';*$% I ndoStars bankers include SBI, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, State Bank of Patiala and State Bank of Mysore. An issuer in wholesale market, IndoStar has issued bonds of upto 4 years maturity. Instruments Amount in ! Crore Rating Long-term Bank Facilities 700 CARE AA- Non-Convertible Debentures 400 CARE AA- Commercial Paper 300 CARE A1+, ICRA A1+ ] IndoStar Capital Finance Private Limited DIBL9I N^GNU@:;N 9>< :>;:DA@ :.+';*$% )3 :.+)$V3 1)%3* (2-*)E-" GN!7$&4"+ >LF6M ($.$/"+ 78 $. "_E"%)".&"+ *"$( 0)*, E%'H". &$E$7)-)*)"35 U"E2*"+ /-'7$- 1).$.&)$- ).3*)*2*)'.3 $.+ E%)H$*" "O2)*8 E-$8"%3 ,$H" 7%'2/,* ). &'.3)+"%$7-" /-'7$- &%"+)* E"%3E"&*)H" $.+ ).!+"E*, 3"&*'% "_E"%*)3" 1'% :.+';*$%M ".,$.&)./ )*3 ($%4"* &%"+)7)-)*85 IndoStars principal shareholders comprise: Goldman Sachs Goldman Sachs Group is a leading global investment banking, securities and investment management frm and provides a wide range of fnancial services to a substantial and diversifed client base that includes corporations, fnancial institutions, governments and high net-worth individuals. Ashmore Group Ashmore Group is one of the worlds leading investment managers, dedicated to the emerging markets. With a current global AUM of USD 64 Billion, Ashmore focuses on a number of investment themes including external debt, local currency, special situations (incorporating distressed debt and private equity) corporate debt, real estate and equity. Everstone Capital An India and South East Asia focused investor with dedicated private equity and real estate funds, Everstone manages funds in excess of USD 1.7 Billion and operates through fve offces across India, Singapore and Mauritius. Annual Report 2011-12 ` Corporate Overview Board and Management Reports Financial Statements N^@N>;:aN ;GN6@UC? BF BFFNU:>D; :.+';*$% 3E"&)$-)3"3 ). 3*%2&*2%"+ 1).$.&" *%$.3$&*)'.35 @," +)H"%3" %$./" '1 &%"+)* E%'+2&*3 &%"$*"3 ).+23*%8 +)11"%".*)$*)'.5 @," (2-*)! 3"&*'%$- $EE%'$&, $--'03 $ 7%'$+"% "_E'32%" $.+ %"+2&"3 &'.&".*%$*)'. %)345 :.+';*$% ,$3 72)-* $ E'%*1'-)' '1 $33"*3M 0,)&, E%"3".*3 $. 'E*)(2( ()_ '1 8)"-+M $33"* &-$33 $.+ ($*2%)*8 E%'1)-"5 9. ).*%'+2&*)'. *' :.+';*$% The product portfolio includes: Secured Corporate Lending IndoStar provides commercial loans for funding asset creation and growth. These loans are in the form of asset-backed loans, term loans and short-term facilities. Loans against Properties IndoStar provides loans at a project level for the construction of commercial and residential properties, mainly in the form of last mile fnancing for the completion of under construction properties. Last mile fnancing minimises execution and construction risks. b IndoStar Capital Finance Private Limited IndoStar also engages with banks and structured fnance providers for co-participation activities. Well regarded in the fnancial community, the Company has successfully established strong relationships with top domestic institutional investors in India. Asset Financing IndoStar has established partnerships with Asset Financing Companies to fnance commercial vehicles and equipment. This has allowed the Company to diversify its asset base and gain a toehold in the asset fnance market. Capital Market Exposure IndoStar offers loans to promoters against listed securities, selected unlisted securities and/or other tangible collateral. Structured and Special Situation Loans IndoStar formulates specialised structured fnancing solutions for corporates to meet their funding requirements. The Company also offers acquisition funding and special situation funding for various purposes. SECTOR-WISE LOAN BOOK as of September 30, 2012 Industry % Current Exposure Cement 4 Financial Services 15 Iron & Steel 12 Chemicals 2 Infrastructure 7 Loan Against Property 28 Glass 2 Automotive 3 Renewable Energy 7 Others 21 Annual Report 2011-12 c Corporate Overview Board and Management Reports Financial Statements ;@UN>D@AN>:>D UNI9@:B>;A:G; P IndoStar Capital Finance Private Limited !BUd:>D @BDN@ANU @B ;A9GN 9 a:;:B> T he Company has established relationships with bankers, clients and other market participants, which is the core of IndoStars long-term vision to establish itself as a leading independent credit institution in India. Strongly integrated with the Indian fnancial system, IndoStar is an active participant in the money and wholesale debt markets. It has gained the confdence of rating agencies and the banking system alike. It has initiated relationships with banks and also forged relationships with market leading players in the NBFC space. :.+';*$% )3 ). $ %"-$*)'.3,)E! 7$3"+ 723)."335 Annual Report 2011-12 Q Corporate Overview Board and Management Reports Financial Statements <CN <:I:DN>6N :>!<NG@A eC9I:@= FB6C; RT IndoStar Capital Finance Private Limited T his ensures the quality of clients and the deals it undertakes. The PE-style credit evaluation as part of its credit process comprises a three-level sifting method including the origination, pre-credit and credit sanction stages. IndoStars lending policies are aimed at ensuring that its loan portfolio remains highly secured with quality assets. Loans disbursed to companies are fully backed by tangible security. This approach to credit allows IndoStar to thoroughly assess the quality of the Company, its management and the robustness of its cash fows. :.+';*$% 1'--'03 $ (2-*)! +)(".3)'.$- $.+ ).! +"E*, +2" +)-)/".&" E%'&"335 Annual Report 2011-12 RR Corporate Overview Board and Management Reports Financial Statements N^N6C@:B> 69G9L:I:@:N; RS IndoStar Capital Finance Private Limited 6B>aNUD:>D GUN6:;:B> 9>< ;GNN< T he ability to underwrite and structure complicated trades has allowed the Company to establish itself in the structured fnance space. IndoStars innovative structuring capabilities enable complex transactions to be executed with speed and precision. The tight structure of transactions through comprehensive covenants ensures a high quality loan portfolio. :.+';*$% 1'--'03 $ 3'-2*)'.!'%)".*"+ $EE%'$&, 1'% "_"&2*)./ &'(E-"_ *%$.3$&*)'.35 Annual Report 2011-12 RX Corporate Overview Board and Management Reports Financial Statements N_"&2*)'. &$E$7)-)*)"3 CASE STUDY N.,$.&)./ &$E)*$- "11)&)".&8 IndoStar was part of an NBFC consortium that fnanced the Indian subsidiary of a large global metals conglomerate through a fve-year loan. The proceeds of the funds were utilised for the last mile construction gap for an iron ore pellet plant and for refnancing the Company. The loan was secured by assets, the value of which was nearly twice the loan amount. The security is in the form of mortgage of assets of Indian entity, corporate guarantee by parent company, and pledge of shares of the Indian subsidiary company. RESULT: @," 6'(E$.8 &'2-+ &'.*).2" )*3 &$E)*$- "_E".+)*2%" 0)*,'2* ).*"%%2E*)'.5 :* ,$3 .'0 %"&")H"+ $-- %"/2-$*'%8 $EE%'H$-3 *' *," &$E)*$- "_E$.3)'. $.+ *," -'$. )3 &2%%".*5 R] IndoStar Capital Finance Private Limited CASE STUDY N.$7-)./ 723)."33 /%'0*, IndoStar provided structured off-balance sheet fnancing to a leading fnancial services provider. The 5-year loan was utilised to expand and maintain the Companys ATM (automated teller machine) network across India. RESULT: @)("-8 $H$)-$7)-)*8 '1 1).$.&)./ ".$7-"+ *," 7'%%'0"% *' ($).*$). /%'0*, ('(".*2(5 @," 7'%%'0"% )3 0"--[E'3)*)'."+ *' %$(E 2E 9@? ($).*".$.&" ."*0'%4 &'H"%$/" $.+ 3"* 2E XM`TT 9@?3 ). $ 3,'%* E"%)'+ '1 *)("5 Annual Report 2011-12 R` Corporate Overview Board and Management Reports Financial Statements FB6C; B> BGNU9@:B>9I N^6NIIN>6N LN;@ GU96@:6N; :?GIN?N>@N< Rb IndoStar Capital Finance Private Limited Internal processes have been institutionalised through the following: Strin,ent control process wlicl ensures regulatory compliance Multiple clecks anJ balances for approvals which ensure the quality of the loan book /ctive participation of shareholders who bring credit perspectives and industry insights Well-JenneJ corporate structure with clear segregation of responsibilities amongst various business heads Lffective risk mana,ement measures to safeguard the Companys assets Support systems wlicl enable close monitoring of performance of loans F%'( $. "_*".3)H" +"$- E)E"-)." *' ).)*)$- 3&%"".)./M &%"+)* $EE%'H$-3 $.+ +)372%3"(".*3 E%'&"33"3M :.+';*$% 3*%)H"3 *' $&,)"H" ).+23*%8 7"3* E%$&*)&"3 *,%'2/, $ 3*%)./".* &'+" '1 &'.+2&* 'H"% $.+ $7'H" %"/2-$*'%8 %"O2)%"(".*35 The loan process encompasses origination and sourcing of business followed by credit appraisal, sanction of credit by the Credit and Risk Committees, portfolio management and supervision till fnal repayment has been received. IndoStars interest rate policy, in compliance with RBI norms, aims to create a fair and transparent standard to determine pricing. The interest rate on loans disbursed is contingent on a number of factors including the tenor of the loan, the internal and external cost of funds, internal cost loading and the credit strength of the customer, among others. LOAN PROCESS DEAL ORIGINATION INITIAL SCREENING DEAL STRUCTURING SANCTION OF CREDIT PORTFOLIO MANAGEMENT
REPAYMENT OF LOAN Annual Report 2011-12 Rc Corporate Overview Board and Management Reports Financial Statements N^GNU:N>6N< ?9>9DN?N>@ ;BI:< DUBC><!BUd FBU 6B>;:;@N>@ GUBDUN;; RP IndoStar Capital Finance Private Limited W ith a keen understanding of the Indian fnancial ecosystem, the management team guides the organisation towards its vision of establishing itself as a leading independent wholesale credit institution in India. The management expertise and vision have enabled IndoStar to successfully close a number of transactions for medium and large corporates. :.+';*$%V3 "_E"%)".&"+ 3".)'% ($.$/"(".* *"$( ,$3 ."$%-8 RTT 8"$%3 '1 &2(2-$*)H" "_E"%)".&" ). *," :.+)$. 1).$.&)$- 3"%H)&"3 ).+23*%85 Annual Report 2011-12 RQ Corporate Overview Board and Management Reports Financial Statements ?"33$/" 1%'( *," ?$.$/)./ <)%"&*'% Y 6NB We believe Indias NBFCs have a pivotal role to play in effciently channelising capital to corporates and enabling growth. Today, the credit requirements of medium and large businesses are growing more than ever before. With customised debt solutions and support of reputed global fnancial institutions, we are focused on leveraging this opportunity in the fxed income market. We are excited to be present in the fxed income space in India, which is growing signifcantly. In the frst year of operations, we are proud to have taken some important strides. We laid the groundwork of building an independent credit institution by forming a team of experienced professionals, creating a holistic product portfolio and setting up sound credit and risk policies. During our frst 18 months (as of September 30, 2012) of operations, we completed 35 deals and established an asset footing of more than ! 1,400 Crore. With a median transaction size of ! 75-100 Crore, we endeavour to position ourselves in the medium-large corporate space . As an independent and professionally managed credit institution, our operations constitute secured and collateralised lending to corporate borrowers in the form of asset- backed loans, loans against properties, promoter funding, and so on. We aim to capitalise on fexibility in solutions and speed of execution to emerge as one of Indias leading credit institutions and capital providers. As we go about conducting our business in this competitive Our Valued Shareholders, In a rapidly evolving world, the fundamentals that guide lending and credit operations have undergone signifcant transformation. In a dynamic economic scenario, credit institutions need fnancial expertise, a fexible business model and deep- seated stakeholder credibility to navigate the rough waters of global fnance. Despite global uncertainties, Indias sustained economic performance has created a growing appetite for capital across all sectors of the economy. Operating in such a scenario, we see the future with optimism. ST IndoStar Capital Finance Private Limited landscape, our professional management and high-quality shareholder base remain our key differentiators. We rely on their deep understanding of the domestic credit market as well as the equity and credit markets in the global economies. The lending business is as much about credibility, as it is about credit. Our credibility quotient is enhanced by our ability to create structured solutions to fulfl multiple credit requirements and introduce globally-benchmarked processes and practices. The way we approach credit and our ability to structure complex deals and effectively deploy funds, gives us a certain edge in the market. Our fexibility in funding debt solutions, ability to understand and structure complicated deals and speed of execution help us build a position of strength. Our stringent credit evaluation process gives us the much-needed confdence to effectively deploy capital and minimise the risk potential. Our multiple checks and balances, strong internal controls and governance and well laid-out controls ensure asset quality and help create a platform for sustainable value creation. I take this opportunity to thank our bankers, shareholders and the team for their support in this journey. We have created a team that thrives on challenges and a culture of continuous learning and innovation to stay relevant in todays dynamic economic conditions. We will continue to drive innovation in Indias structured fnance space. We stand frm in our commitment to build a sustainable business, deliver value to all stakeholders and serve Indias vibrant economy. Thank you. Vimal Bhandari Managing Director and Chief Executive Offcer 35 DEALS Completed during frst 18 months ofoperations ! 75100 CRORE Median transaction size Annual Report 2011-12 SR Corporate Overview Board and Management Reports Financial Statements Mr. Sain has almost two decades of global private markets investment experience across asset classes. He holds a BBA from the University of Massachusetts at Amherst and an MBA from Cornell University, USA. He is on the Board of IndoStar as a representative of Everstone Capital.
Mr. Kapur has over two decades of private markets investment experience across Asia and Europe. He holds a Bachelor of Commerce degree from the University of Delhi and is a qualifed Chartered Accountant. He is on the Board of IndoStar as a representative of Everstone Capital. Mr. Jhaveri has over 18 years of experience in investments, strategy, M&A and investment banking. He holds a Bachelor of Commerce degree from the University of Mumbai and an MBA from Babson College, Graduate School of Business, USA. He is on the Board of IndoStar as a representative of Everstone Capital. Mr. Mehta has over 17 years of experience spanning asset management, corporate strategy and investment banking. He holds a Bachelor of Commerce from the University of Mumbai and is a qualifed Chartered Accountant. He is on the Board of IndoStar as a representative from Ashmore. Mr. Shahdadpuri has over 14 years of successful private equity investing and advisory experience in India, UK and USA. He holds an undergraduate Law degree from Kings College, University of London, and an MBA from INSEAD. He is on the Board of IndoStar as a representative of Baer Capital. Mr. Oberoi has over two decades of experience in the feld of investments, including advising on various investment strategies, as well as structuring international joint ventures and transactions. He holds a Bachelor of Arts degree from Cornell University and an MBA degree from Johnson Graduate School. He is on the Board of IndoStar as a representative of ACPI. Ms. Bhatia has 10 years of experience in private equity. She received her Bachelor of Arts in Economics and Computer Science from Smith College and an MBA from Harvard Business School. She is on the Board of IndoStar as a representative of Goldman Sachs. G%'1)-"3 '1 *," L'$%+ '1 <)%"&*'%3 $.+ 6FB SAMEER SAIN ATUL KAPUR DHANPAL JHAVERI RAJESH MEHTA DEEPAK I. SHAHDADPURI ALOK OBEROI SHWETA BHATIA SS IndoStar Capital Finance Private Limited Mr. Schwartz has over 20 years of investment banking experience. He completed his MBA from the Wharton School, University of Pennsylvania, USA. He is on the Board of IndoStar as an Independent Director. Mr. Parikh has over 25 years of experience in advising clients in the areas of entry strategy, business model identifcation, structuring a business presence, M&A and other business re-organisations. He holds a Bachelor of Commerce degree from the University of Mumbai and is a qualifed Chartered Accountant. He is on the Board of IndoStar as an Independent Director. Managing Director and Chief Executive Offcer Mr. Bhandari is responsible for the overall supervision, management and functioning of the Company. He has 25 years of experience in the fnancial services industry. He holds a Bachelor of Commerce degree from the University of Mumbai and is a qualifed Chartered Accountant. Wholetime Director Mr. Hinduja is responsible for business origination for the Company. He has over 15 years of experience in M&A, capital markets and technology in the USA, Middle East and India. He is a graduate from Boston University, USA, with a degree in Economics and Psychology. Wholetime Director Mr. Baid is responsible for credit and structuring. He has 12 years of experience across the fnancial services industry. He holds a Bachelor of Commerce degree from the University of Calcutta and an MBA from the Indian Institute of Management, Calcutta. Chief Financial Offcer Mr. Thapar is responsible for the fnance and business support function. He has over 25 years of work experience across banks and major corporates. He holds a Bachelor of Commerce degree and an MBA from the University of Delhi. ERIC STUART SCHWARTZ BOBBY PARIKH VIMAL BHANDARI SANJAY HINDUJA SANDEEP BAID PANKAJ THAPAR Annual Report 2011-12 SX Corporate Overview Board and Management Reports Financial Statements !" IndoStar Capital Finance Private Limited 2011-12 witnessed signifcant volatility across the economic and political spectrum. Deepening European crisis and fragile US economic recovery have led to a sluggish global economic growth. However, coordinated initiatives by central governments have moderately revived global fnancial markets and marginally improved the overall business environment. The World Bank has predicted a global GDP growth of 2.5% in 2012, increasing to 3% and 3.3%, in 2013 and 2014, respectively. Against the backdrop of persistent global economic hardship, India witnessed 6.5% growth in 2011-12, the lowest in nine years, albeit higher than most developed economies. This was possible owing to a strong domestic market and robust regulatory mechanisms. Notwithstanding temporary challenges, Indias long-term economic growth prospects continue to be bright. The overall business environment is on a positive trajectory. Indias per capita income grew 16.9% on a nominal basis during 2011-12, which further led to a rise in consumption levels and growing disposable incomes. Increasing infrastructure spend, a reform-focused government and several growth initiatives under the 12th Five-Year Plan will further accelerate Indias economic growth in the years to come. Indias Banking, Financial Services and Insurance industry (BFSI) is large and diverse. It works as the lifeline for the Indian economy and provides credit and liquidity in the system. With Indias GDP projected to be back on the growth track by 2012-13, the BFSI sector is expected to witness a growth spurt, with Indian companies fnancing requirements rising commensurately. Over the years, the Non-Banking Finance Companies (NBFCs) have played a vital role in Indias economy. NBFCs complement the banking sector and fnancial institutions in meeting the credit needs of the growing economy. Ensuring credit availability is of utmost importance to sustain Indias economic growth rate. In this scenario, NBFCs continue to play a critical role in providing an impetus to Indias credit market. The sector plays a signifcant role in the credit space and has established itself as an important link in Indias fnancial market. Emergence of new business models and niche positioning is enabling NBFCs to provide holistic funding solutions to corporate borrowers. These credit institutions also provide specialised fnancial services to corporates, such as securities-based lending, margin funding, IPO fnancing and promoter funding. NBFCs providing specialised funding solutions offer a conducive platform for corporate deals and are ideal for last-mile funding of large projects. In the realty sector, for instance, NBFCs offer funding for land acquisition, construction and loans against property, with GLOBAL ECONOMIC REVIEW INDIAN ECONOMIC REVIEW NBFC INDUSTRY: AN OVERVIEW #$%$&'('%) +,-./--,0% $%1 2%$34-,- Annual Report 2011-12 !5 Corporate Overview Board and Management Reports Financial Statements completed or nearly-completed projects as the collateral. Such structured and collateralised deals are favoured by corporates as they are faster with shorter turnaround time, offer a better yield and are fexible vis--vis other funding options. Growth in Indias NBFC sector Total asset size: With around 14,000 NBFCs, the total asset size of Indias NBFC market has increased from ~ ! 288,593 Crore in 2006 to ~ ! 661,186 Crore in 2011, growing at a CAGR of 23%. Banks exposure: Exposure to NBFCs by Indian banks surged from ! 54,171 Crore to ! 121,774 Crore between 2006 and 2011, growing at 22% CAGR. (Source: Thorat Committee Report) Corporates have increasingly started tapping the fxed income market versus the equity market. Demand for debt instruments, including PSU bonds, corporate bonds and high- yield paper is considered safe as these are low-risk options. The fxed income market is growing steadily with a current daily turnover of USD 3-4 Billion. Indias total outstanding corporate debt is to the tune of USD 160 Billion (2010), with an annual issuance of USD 45 Billion. Key growth drivers in the fxed income market are: Foreign participation: Indias debt market has been opened up for foreign investment. Foreign investors are permitted to invest in government securities and corporate bonds in India by registering themselves with SEBI. Increasing investment opportunity: Foreign investors can collectively invest a total of up to USD 45 Billion in corporate debt securities and up to USD 20 Billion in government securities, based on their investment objectives. High bond yields: The RBIs aggressive stance and reduction in Statutory Liquidity Ratio (SLR) in its July 2012 monetary policy review will gradually push up bond yields in the near term. However, this may reverse as the interest rate regime softens going ahead. NBFC sector: Growth drivers Better macro-economic funJamentas: With fnancial reforms, less volatility in the rate of infation and lowering of wholesale borrowing rates, Indias NBFC landscape is likely to improve. ReJuceJ bank creJit to inJustries: Bank credit to industries decelerated to 17.2% in July 2012, compared to 21.2% in July 2011. The conservative and risk-averse approach of banks is making them lend less credit to industries, creating a signifcant business opportunity for NBFCs. (Source: RBI) FIXED INCOME MARKET IN INDIA !6 IndoStar Capital Finance Private Limited Innovative anJ JiversiheJ proJuct portfoio: Product innovation, along with customised and fexible repayment options and cross-channel sales, present better growth opportunities for NBFCs. (Source: RBI) Opportunities Tle NLlC-ND-Sl lenJin, se,ment re,istereJ a 2O% C/Cl over tle last few years, indicating the scope and business potential. (Source: RBI) Witl some NLlCs lavin, establisleJ a nicle witl specialiseJ funJin, solutions, it presents a signifcant opportunity to capture the growing fnancing needs of Indian companies. / multi-sector anJ JiversineJ approacl of specialiseJ anJ nicle creJit institutions enables broader exposure across a diverse set of industries and reduces sector-specifc demand risk. Challenges A key challenge faced by NBFCs is the ability to respond to dynamic market conditions and provide a wide-ranging product offering with stringent due diligence. The ability of credit institutions to compete in the market effectively will depend upon their capability to raise low-cost funds. Some other challenges comprise: / slu,,isl economy can curtail prospects for business ,rowtl Lconomic slowJown can enlance creJit costs Ti,lt liquiJity conJitions can increase cost of funJs le,ulation anJ Jevelopment neeJ to be in tanJem to proviJe tle ri,lt environment for growth NBFCs The potential in the lending business is growing, considering the rising credit demand from domestic companies on the back of sustained economic growth. In the current scenario, providing niche and customised funding solutions by way of prudent credit standards and due diligent processes can help credit institutions withstand competition from banks and other fnancial institutions. Core strengths such as sound credit appraisals, strong customer relations, stringent monitoring processes and product innovation can be the key differentiator between credit institutions. #$%$&'('%) +,-./--,0% $%1 2%$34-,- OUTLOOK Annual Report 2011-12 !7 Corporate Overview Board and Management Reports Financial Statements Business overview IndoStar Capital Finance Private Limited (IndoStar) is an independent credit institution offering debt fnancing solutions and highly structured trades to customers in a diverse set of industries. It commenced operations in the second quarter of 2011-12 to cater to wholesale credit requirements of medium to large corporates. IndoStars portfolio is well aligned with the rising growth opportunities in Indias fnancial system. It provides solutions for credit needs ranging from project and capital expenditure funding, long-term working capital, special situations, acquisition fnancing and mortgage fnancing. Core strengths IndoStars inherent strengths drive its endeavour to become a leading independent credit institution and ensure effective capital deployment. These are: Management A highly-qualifed senior management team, with a collective business experience of nearly 100 years, and expertise in global equity and debt markets guide IndoStars business. Sponsors Sponsored by an array of global fnancial institutions managing multi-Billion dollar investments gives IndoStar access to hands-on international experience and multi- product expertise. Everstone Capital, Ashmore Group and Goldman Sachs are its key sponsors. Higb capita aJequacy High capital adequacy provides the necessary level of cushion to IndoStars creditors from associated business risks. High capital absorbs volatility in cash fows and other business risks. Cient reations Due to strong relationships with corporates, IndoStar is well positioned to build an asset management business covering both domestic and offshore investors. LiquiJity Safety, liquidity and return represent the three principles that help IndoStar run its treasury in a prudent manner. The Company adheres to the internal policy of maintaining adequate liquidity reserves to be invested in short-term treasury instruments. COMPANY OVERVIEW !8 IndoStar Capital Finance Private Limited SecureJ enJing IndoStar endeavours to engage in a fully-secured wholesale lending business. This principle not only positively impacts its asset quality, but also reduces risks emanating from the asset portfolio. Financia performance IndoStar registered a total income of ! 89.85 Crore during the year ended March 31, 2012. The total expenditure was recorded at ! 30.86 Crore and the PBT for the year was registered at ! 58.99 Crore. Further, despite being just one year into its operations, the Company registered a net proft of ! 53.21 Crore. Its net worth as on March 31, 2012 stood at ! 934.62 Crore. During the year under review, IndoStars loan book was ! 870 Crore, including loans to corporates of ! 408 Crore for meeting their operating requirements, asset collateralised loans of ! 297 Crore and loans against property of ! 165 Crore. Risk management IndoStar is subject to a variety of risks in the course of its operations. As such, it has formulated a sound risk management strategy to address and mitigate the risks it is exposed to. IndoStars risk management initiatives are aligned to its overall business objectives. Individual policies covering KYC, Anti-Money Laundering, Credit, Interest Rate and Fair Practices, among others, have been put in place to ensure long-term business sustainability. These policies are implemented through various committees, such as the Risk Committee, Credit Committee, ALCO Committee and Audit Committee. Internal controls and systems IndoStars comprehensive and effective internal control system facilitates smooth business operations. Stringent internal controls ensure regulatory compliance and protect the Companys assets from loss or misuse. The Companys lending policies ensure that the loan portfolio is secured with quality assets. The Companys loan process encompasses origination and sourcing of business, followed by credit appraisal and approval by the Credit and Risk Committees. #$%$&'('%) +,-./--,0% $%1 2%$34-,- Annual Report 2011-12 !9 Corporate Overview Board and Management Reports Financial Statements Human resource management IndoStars human resource supports its business strategies and enable the Company in providing services valued by its clients. The Company attributes its achievements during the year to the knowledge base of its workforce and the strategic direction provided by the senior management. IndoStar focuses on hiring specialised talent with core strengths in various key business operations, such as credit evaluation, risk and treasury management, information technology and client relations. The organisational culture is fully geared to encourage the workforce to innovate and achieve the Companys objectives. Cautionary statement Certain statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may vary signifcantly from the forward looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement its strategy. !" IndoStar Capital Finance Private Limited Dear Members, Your Directors have pleasure to present the Third Annual Report on the affairs of your Company together with the Audited Statement of Accounts for the year ended March 31, 2012. The highlights of the fnancial results of the Company for the fnancial years 2011-12 and 2010-11 are as under: Amount in ! Crore Particulars As at March 31, 2012 As at March 31, 2011 Total Income 89.85 0.23 Total Expenditure 30.86 7.41 Proft/ (Loss) before tax 58.99 (7.18) Less : Provision for tax Current Tax 9.37 - Deferred Tax Liability (3.39) - Income tax for earlier years - 0.00002 Net Proft/ (Loss) after tax 53.21 (7.18) Prior period item - (0.004) Transfer to Reserve Fund U/s 45-IC of the Reserve Bank of India Act, 1934 10.64 - Balance brought forward from previous period (7.18) 0.001 Balance carried to Balance Sheet 35.38 (7.18) During the year, the Gross Income of the Company was ! 89.85 Crore and the Proft/Loss After Tax was ! 53.21 Crore (Previous Year: ! 0.23 Crore and ! (7.18) Crore, respectively) The Companys Net Worth as on March 31, 2012 was at ! 934.62 Crore against ! 657.91 Crore as on March 31, 2011. As part of its risk management process and to have a prudent risk provisioning / reserve policy for loan assets, a provision of ! 2.63 Crore (Previous Year: ! Nil) at the rate of 0.30% of outstanding standard assets was made this year, which is in excess of 0.25% of outstanding standard assets as required pursuant to the Reserve Bank of India (RBI) requirement in this regard. In addition to the provision for standard assets, an additional Ad-Hoc provision of ! 6 Crore was also made this year. An amount of ! 10.64 Crore (Previous Year: ! Nil) is proposed to be transferred to Special Reserve Fund pursuant to Section 45-IC of the RBI Act, 1934. Since the Company is in a growth phase, your Directors consider it prudent to conserve resources and therefore despite suffcient distributable profts, do not recommend any dividend on equity shares for the fnancial year under review. FINANCIAL HIGHLIGHTS DIVIDEND #$%&'()%*+ -&.)%( Annual Report 2011-12 !/ Corporate Overview Board and Management Reports Financial Statements a) Increase in the Authorised Share Capital During the period under review, the Authorised Share Capital of the Company was increased from ! 75 Crore divided into 7.50 Crore Equity Shares of ! 10/- each to ! 80 Crore divided into 8 Crore Equity Shares of ! 10/- each. b) Increase in Issued, Subscribed and Paid-up Share Capital During to the period under review, the Company issued and allotted 89,04,814 Equity Shares of ! 10/- and consequently, the issued and subscribed share capital has increased to ! 77.65 Crore and consequently, the paid-up share capital has increased to ! 68.62 Crore. The Company is engaged in only one activity namely lending. Its customers are primarily corporate entities who need funding for their diverse fnancial needs, including project and capital expenditure funding, long term working capital, special situations and acquisition fnancing. The Company aims to provide debt fnancing solutions to borrower and towards this it seeks participation of banks, fnance companies and mutual funds to supplement its own lending activities. After infusion of capital of approximately ! 891 Crore during the period March - June 2011 by its parent company, IndoStar Capital, Mauritius (ICM) the Company enhanced the scale of its operations by enlarging the team, putting in place robust risk management processes; as part of its objective of becoming a wholesale credit institution. For the year ended March 31, 2012, the loan book of the Company was ! 870 Crore, which included loans to companies for meeting their operating requirement ! 408 Crore, asset collateralised loans of ! 297 Crore and loans against property of ! 165 Crore, giving the Company a diversifed loan book. As part of its fund management policy, the Company keeps at least 15% of its net worth as treasury assets. Deployment of surplus funds is in treasury assets which are bank deposits, debt mutual funds or non-convertible debt instruments. The Company earned interest income of ! 34.07 Crore, income from temporary deployment in treasury assets was ! 46.47 Crore while the fee income was ! 9.31 Crore. After meeting expenses, interest outfow and standard asset provisioning, the proft before tax for the year was ! 58.9 Crore and proft after tax for the year was ! 53.2 Crore The Company is engaged in only one activity namely lending. Its customers are primarily corporate entities who need funding for their diverse fnancial needs, including project and capital expenditure funding, long term working capital, special situations and acquisition fnancing. BUSINESS OVERVIEW SHARE CAPITAL !0 IndoStar Capital Finance Private Limited During the period under review, the Company has raised ! 100 Crore, through its maiden issuance of Commercial Paper. The Companys Debt Equity ratio as on March 31, 2012 stands at 0.11:1. Subsequent to the period under review, the Company has raised a further ! 200 Crore by issuance of a Commercial Paper and a further ! 200 Crore through its issuance of Secured, Rated, Listed, Redeemable, Non-Convertible Debentures. The Companys Debt Equity ratio as on May 31, 2012 stands at 0.21:1. a) Short Term During the period under review, Credit Analysis & Research Limited (CARE) has assigned CARE A1+ (pronounced A One Plus) rating in respect of the short term borrowing programme of the Company in form of commercial paper of ! 100 Crore which was enhanced to ! 200 Crore. The grade of rating indicates very strong degree of safety regarding timely servicing of short term fnancial obligations and further indicates that the borrowing carries lowest credit risk. b) Long Term Bank Borrowings: During the period under review, Credit Analysis & Research Limited (CARE) has assigned CARE AA- (pronounced Double A Minus) rating in respect of the long term borrowing programme of ! 500 Crore of the Company from banks. The grade of rating indicates high degree of safety regarding timely servicing of long term fnancial obligations and further indicates that the borrowing carries very low credit risk. Non-Convertible Debentures: Additionally, CARE has assigned CARE AA- (pronounced Double A Minus) rating in respect of issue of non-convertible debentures ! 250 Crore by the Company. The grade of rating indicates high degree of safety regarding timely servicing of long term fnancial obligations and further indicates that the borrowing carries very low credit risk. Your Company would continue to focus on its core customer constituency of corporate borrowers for meeting their debt fnancing needs. Your Company would use its structuring skills to develop innovative fnancing solutions, funds for which would be provided to the borrowers not only by your Company but also mobilised from other players like other Non-Banking Financial Company (NBFC), banks or mutual funds. During the year under review, the Corporate Offce of the Company at Mumbai has been shifted from FCH House, Lower Parel, Mumbai - 400013 to One Indiabulls Center, Senapati Bapat Marg, Mumbai - 400013. CREDIT RATING OUTLOOK SHIFTING OF CORPORATE OFFICE RESOURCES AND LIQUIDITY #$%&'()%*+ -&.)%( Annual Report 2011-12 !! Corporate Overview Board and Management Reports Financial Statements The RBI requires every systemically important non-deposit taking non-banking fnancial company to maintain a minimum capital ratio consisting of Tier I and Tier II capital which shall not be less than 15% of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items. Consequent upon the allotment of shares, the net worth of the Company was enhanced and the Capital to Risk Assets Ratio (CRAR) of the Company as on March 31, 2012 stood at 85.83%, which is well above CRAR prescribed by the RBI. It is the intention of the Company to maintain the CRAR at or above 25%. The Net Owned Funds of the Company as on March 31, 2012 stood at ! 931.03 Crore. The Company being a Non-Deposit Accepting and Holding Non-Banking Finance Company has not accepted any deposits from the public during the year under review and shall not accept any deposits from the public without obtaining prior approval of the RBI. As on March 31, 2012, the Company has complied with all regulations and guidelines of the RBI, as are applicable to it as a systematically important non-deposit accepting NBFC. In accordance with the Articles of Association of the Company, none of the Directors are liable to retire by rotation at the ensuing Annual General Meeting of the members. Based on confrmations received, none of the Directors are disqualifed for appointment under Section 274(1) (g) of the Companies Act, 1956. A summary of the Corporate Governance measures adopted by the Company, is given below: i. Your Company believes that sound Corporate Governance is a pre-requisite to attainment of excellent performance in terms of creation of value and wealth for its stakeholders on sustainable and long-term basis. ii. Your Company believes in transparency and has always maintained high level of Corporate Governance. Your Board has a primary role of trusteeship to protect and enhance stakeholder value through strategic supervision of the Company by providing direction and exercising appropriate controls. In addition to the basic governance issues, your Board lays strong emphasis on transparency, accountability and integrity. iii. At present, the Board comprises 2 (two) Independent Directors, 7 (seven) Non- Executive Directors and 3 (three) Executive Directors. iv. During the period under review, 7 (seven) Board Meetings were held. Board Meeting(s) were held at least once in every quarter. CAPITAL ADEQUACY RATIO & NET OWNED FUNDS PARTICULARS OF DEPOSITS RBI GUIDELINES DIRECTORS CORPORATE GOVERNANCE !1 IndoStar Capital Finance Private Limited v. In compliance with the directions/guidelines issued by the RBI and the provisions of the Companies Act, 1956, as amended, the Board of Directors has constituted the following committees and the role of each committee has been broadly defned for effective business operations and governance of the Company.
1. Audit Committee 2. Credit Committee 3. Asset Liability Management Committee 4. Risk Management Committee 5. Compensation & Nomination Committee 6. Executive Committee 7. Management Committee 8. Grievance Redressal Committee During the period under review, 2 meetings of the Audit Committee, 8 meetings of Credit Committee, 2 meetings of Asset Liability Management Committee, 2 meetings of Risk Management Committee and 1 meeting of the Compensation and Nomination Committee were held in addition to several meetings of other Committees, on an as required basis. Minutes of meetings of all Committees of the Board are placed before the Board for discussion and noting. vi. In compliance with directions issued by the RBI, the Board of Directors has adopted the following Policies / Guidelines for the Company: 1. Fair Practise Code 2. Investment Policy including policy on demand/call loans 3. Policy on Single/Group Exposure Norms 4. Guidelines on Know Your Customer and Anti Money Laundering Policy 5. Risk Framework Policy / Risk Management Policy 6. Interest Rate Policy 7. ALCO Policy and as an important part, Treasury Deployment Policy vii. In addition, as a part of its larger good corporate governance initiative, the Board of Directors has adopted the following Policies / Codes for the Company: 1. Code of Conduct for Directors & Employees 2. Code of Conduct for Prevention of Insider Trading 3. Media Communication Policy 4. Record Retention Policy Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, the Directors confrm that: DIRECTORS RESPONSIBILITY STATEMENT #$%&'()%*+ -&.)%( Annual Report 2011-12 !2 Corporate Overview Board and Management Reports Financial Statements a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same; b) the selected accounting policies were applied consistently and made based on judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the Proft of the Company for the period ended on that date; c) proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the accounts have been prepared on a going concern basis. The particulars relating to conservation of energy & technology absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not applicable to the Company. The Companys activities do not require any technology to be absorbed on the lines of what is mentioned in the aforesaid rules. However, the Company is taking all possible steps to make the most conserve and effcient use of electricity and adopt latest technology in its business. The details of the earnings and outgo in Foreign Exchange during the year under review are provided below. Amount in ! Crore Expenses in Foreign Currency (Accrual Basis) For the Year ended March 31, 2012 For the Year ended March 31, 2011 Travelling Expenses - 0.002 Others (Conference Charges) 0.01 0.002 Total 0.01 0.004 The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules made there under is given as a annexure appended hereto and forms part of this report. The report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining the copy of annexure may write to the Company Secretary at the Registered Offce of the Company. M/s. S R B C & Co., Chartered Accountants (earlier known as S. R. Batliboi & Co.), are the Statutory Auditors of the Company for the fnancial year ended March 31, 2012 and will hold offce till the ensuing Annual General Meeting. They have expressed their willingness to continue, if re-appointed. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO PARTICULARS OF EMPLOYEES AUDITORS !3 IndoStar Capital Finance Private Limited M/s. S R B C & Co., Chartered Accountants, are eligible for re-appointment and have consented to the same and have confrmed that the appointment, if made, shall be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and they are not disqualifed for such appointment within the meaning of Section 226 of the Companies Act, 1956. The Board recommends the re-appointment of M/s. S R B C & Co., Chartered Accountants, as Statutory Auditors of the Company for the year ended March 31, 2012. The Members may also note that M/s. Deloitte Haskins & Sells, Chartered Accountants had been appointed as internal auditors of the Company for the year 2011 -12 pursuant to the provisions of the Companies (Auditors Report) Order 2003. The Board takes this opportunity to record its sincere appreciation for the dedicated services rendered by employees at all levels. We would like to express our grateful appreciation for the assistance and support extended by the Reserve Bank of India, fnancial institutions, banks, stakeholders, rating agencies, auditors, all other government-semi government authorities and other business associates. ACKNOWLEDGE- MENT By the Order of the Board of Directors For IndoStar Capital Finance Private Limited Place : Mumbai Date : June 20, 2012 Vimal Bhandari MD and CEO Dhanpal Jhaveri Director #$%&'()%*+ -&.)%( Annual Report 2011-12 !4 Corporate Overview Board and Management Reports Financial Statements To The Members of IndoStar Capital Finance Private Limited 1. We have audited the attached Balance Sheet of IndoStar Capital Finance Private Limited (the Company) as at March 31, 2012 and also the Statement of Proft and Loss and the cash fow statement for the year ended March 31, 2012 on that date annexed thereto. These fnancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these fnancial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; iii. The balance sheet, statement of proft and loss and cash fow statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the balance sheet, statement of proft and loss and cash fow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. v. On the basis of the written representations received from the Directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the Directors are disqualifed as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. 567$()%+* -&.)%( !8 IndoStar Capital Finance Private Limited vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012; b) in the case of the statement of proft and loss, of the proft for the year ended March 31, 2012 ended on that date; and c) in the case of cash fow statement, of the cash fows for the year ended March 31, 2012 ended on that date. For S R B C & Co. Firm Registration No. 324982E Chartered Accountants per Shrawan Jalan Partner Membership No. 102102 Place : Mumbai Date : June 20, 2012 567$()%+* -&.)%( Annual Report 2011-12 !9 Corporate Overview Board and Management Reports Financial Statements (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets. (b) Fixed assets have been physically verifed by the management during the year and no material discrepancies were identifed on such verifcation. (c) There was no disposal of a substantial part of fxed assets during the year. (ii) The Company did not hold any inventory during the year. (iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon. (b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to clause 4(iii)(g) of the Order are not applicable to the Company and hence not commented upon. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fxed assets and sale of services. The activities of Company do not involve purchase of inventory and the sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. (v) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956. (vi) The Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company. (ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed provident fund, income-tax, service tax, cess and other material statutory dues applicable to it. The provisions relating to investor education and protection fund, employees state insurance, sales-tax, wealth tax, customs duty and excise duty are not applicable to the Company. 5::&;6%& %&<&%%&7 () $: .=%=>%=.? ! )< )6% %&.)%( )< &@&: 7=(& 1" IndoStar Capital Finance Private Limited (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income-tax, service tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to investor education and protection fund, employees state insurance, sales-tax, wealth tax, customs duty and excise duty are not applicable to the Company. (c) According to the information and explanations given to us, there are no dues of provident fund, income-tax, service tax, and cess which have not been deposited on account of any dispute. The provisions relating to investor education and protection fund, employees state insurance, sales-tax, wealth tax, customs duty and excise duty are not applicable to the Company. (x) The Company has been registered for a period of less than fve years and hence we are not required to comment on whether or not the accumulated losses at the end of the fnancial year is ffty per cent or more of its net worth and whether it has incurred cash losses in the current fnancial year and in the immediately preceding fnancial year. (xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a fnancial institution, bank or debenture holders. (xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4(xiii) of Companies (Auditors Report) Order, 2003 (as amended) is not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or fnancial institutions (xvi) The Company did not have any term loans outstanding during the year. 5::&;6%& %&<&%%&7 () $: .=%=>%=.? ! )< )6% %&.)%( )< &@&: 7=(& Annual Report 2011-12 1/ Corporate Overview Board and Management Reports Financial Statements (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. (xix) The Company did not have any outstanding debentures during the year. (xx) The Company has not raised any money through a public issue during the year. (xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. 5::&;6%& %&<&%%&7 () $: .=%=>%=.? ! )< )6% %&.)%( )< &@&: 7=(& For S R B C & Co. Firm Registration No. 324982E Chartered Accountants per Shrawan Jalan Partner Membership No. 102102 Place : Mumbai Date : June 20, 2012 10 IndoStar Capital Finance Private Limited As per our report of even date For S R B C & Co. Firm Registration No. 324982E Chartered Accountants For and on behalf of the Board of Directors of IndoStar Capital Finance Private Limited per Shrawan Jalan Partner Membership No. 102102 Vimal Bhandari MD and CEO Dhanpal Jhaveri Director Pankaj Thapar Chief Financial Offcer Place : Mumbai Date : June 20, 2012 Jitendra Bhati Company Secretary Amount in ! Particulars Note No As at March 31, 2012 As at March 31, 2011 I EQUITY AND LIABILITIES (1) Shareholders' funds (a) Share capital 3 684,174,473 512,257,873 (b) Reserves and surplus 4 8,661,994,210 6,066,888,380 9,346,168,683 6,579,146,253 (2) Non-current liabilities (a) Other long term liabilities 5 32,071,804 - (b) Long term provisions 6 65,010,919 500,000 97,082,723 500,000 (3) Current liabilities (a) Short-term borrowings 7 993,343,427 - (b) Trade payables(Also refer note no. 25 ) 57,982,745 27,474,669 (c) Other current liabilities 5 16,533,222 9,047,857 (d) Short-term provisions 6 32,903,969 102,191 1,100,763,363 36,624,717 TOTAL 10,544,014,769 6,616,270,970 II ASSETS (1) Non-current assets (a) Fixed assets 8 - Tangible assets 19,759,262 45,198 (b) Deferred tax assets (net) 9 35,893,065 - (c) Long term loans and advances 10 5,466,037,653 21,581 5,521,689,980 66,779 (2) Current assets (a) Current investments 12 1,290,652,888 1,168,423 (b) Cash and bank balances 13 447,744,649 6,613,415,101 (c) Short-term loans and advances 10 3,245,634,985 5,598 (d) Other current assets 11 38,292,267 1,615,069 5,022,324,789 6,616,204,191 TOTAL 10,544,014,769 6,616,270,970 Signifcant Accounting Policies 2.1 The notes referred to above form an integral part of the fnancial statements. A=B=:'& C?&&( as at March 31, 2012 Annual Report 2011-12 1! Corporate Overview Board and Management Reports Financial Statements As per our report of even date For S R B C & Co. Firm Registration No. 324982E Chartered Accountants For and on behalf of the Board of Directors of IndoStar Capital Finance Private Limited per Shrawan Jalan Partner Membership No. 102102 Vimal Bhandari MD and CEO Dhanpal Jhaveri Director Pankaj Thapar Chief Financial Offcer Place : Mumbai Date : June 20, 2012 Jitendra Bhati Company Secretary Amount in ! Particulars Note No Year Ended March 31, 2012 Year Ended March 31, 2011 INCOME Revenue from operations 14 898,517,514 2,295,759 Other income 15 1,093 - TOTAL 898,518,607 2,295,759 EXPENDITURE Employee beneft expenses 16 149,736,537 46,831,068 Finance cost 17 1,964,651 - Depreciation and amortisation 8 2,074,317 802 Other expenses 18 66,642,575 27,287,653 Provisions 19 88,208,920 - TOTAL 308,627,000 74,119,523 PROFIT / (LOSS) BEFORE TAXATION 589,891,607 (71,823,764) PROVISION FOR TAXATION Current tax 93,678,010 - Deferred tax Liability / (Asset) 9 (35,893,065) - Income tax of earlier years 293 TOTAL TAX EXPENSE / (INCOME) 57,784,945 293 PROFIT / (LOSS) AFTER TAX FROM CONTINUING OPERATIONS 532,106,662 (71,824,057) Prior period items - (46,400) NET PROFIT / (LOSS) AFTER TAXES 532,106,662 (71,870,457) EARNINGS PER SHARE 20 Basic (!) 8.22 (204.21) Diluted (!) 8.22 (204.21) Nominal value of equity share (!) 10 10 Signifcant Accounting Policies 2.1 The notes referred to above form an integral part of the fnancial statements. C(=(&D&:( )< E%)<$( =:7 F)** for the year ended March 31, 2012 11 IndoStar Capital Finance Private Limited Amount in ! Particulars Year Ended March 31, 2012 Year Ended March 31, 2011 A. CASH FLOW FROM OPERATING ACTIVITIES Proft before taxes 589,891,607 (71,823,764) Depreciation and amortisation 2,074,317 802 Loss / (proft) on sale of fxed assets (net) 10,594 - Provision for diminution in value of investments 1,928,750 - Issue expenses for equity shares 250,000 - Provisions for standard assets 86,280,170 - Provision for gratuity 418,890 - Provision for leave encashment 520,035 - OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 681,374,363 (71,822,962) MOVEMENTS IN WORKING CAPITAL Increase / (decrease) in trade payables 30,508,076 27,892,169 Increase / (decrease) in provisions - 101,899 Increase / (decrease) in other liabilities 39,557,169 9,047,857 Decrease / (increase) in loans and advances (8,739,167,040) (1,597,497) Decrease / (increase) in other assets (36,677,198) - CASH GENERATED FROM OPERATIONS (8,024,404,630) (36,378,534) Direct taxes paid (net of refunds) (83,562,830) (21,874) NET CASH FLOW FROM / USED IN OPERATING ACTIVITIES (A) (8,107,967,460) (36,400,408) B CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fxed including intangible assets (21,798,975) (46,000) Purchase of investments (34,371,744,732) - Sale of investments 33,080,331,520 (1,168,423) NET CASH USED IN INVESTING ACTIVITIES (B) (1,313,212,187) (1,214,423) G=*? HB)I C(=(&D&:( for the year ended March 31, 2012 Annual Report 2011-12 12 Corporate Overview Board and Management Reports Financial Statements G=*? HB)I C(=(&D&:( for the year ended March 31, 2012 Amount in ! Particulars Year Ended March 31, 2012 Year Ended March 31, 2011 C CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of equity share capital 174,031,980 510,136,072 Securities premium on issue of equity capital 2,088,383,788 6,120,548,280 Amount received from issue of commercial papers 993,343,427 - Issue expenses for equity shares paid (250,000) - NET CASH FROM FINANCING ACTIVITIES (C) 3,255,509,195 6,630,684,352 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A + B + C) (6,165,670,452) 6,593,069,521 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 6,613,415,101 20,345,580 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 447,744,649 6,613,415,101 COMPONENTS OF CASH AND CASH EQUIVALENTS Cash and Cash Equivalents at the end of the year i) Cash on hand 4,060 25,317 ii) Balances with scheduled banks in: Current accounts 22,740,589 63,389,784 Deposits with orginal maturity of less than three months 425,000,000 6,550,000,000 TOTAL CASH AND CASH EQUIVALENTS (NOTE 15) 447,744,649 6,613,415,101 As per our report of even date For S R B C & Co. Firm Registration No. 324982E Chartered Accountants For and on behalf of the Board of Directors of IndoStar Capital Finance Private Limited per Shrawan Jalan Partner Membership No. 102102 Vimal Bhandari MD and CEO Dhanpal Jhaveri Director Pankaj Thapar Chief Financial Offcer Place : Mumbai Date : June 20, 2012 Jitendra Bhati Company Secretary 13 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 IndoStar Capital Finance Private Limited (formerly known as R V Vyapaar Private Limited) (the Company) was incorporated on July 21, 2009. The Company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company vide Certifcate No. N-05.06857 dated June 17, 2010 (issued in the name of R V Vyapaar Private Limited). The Company is primarily engaged in Loans business. The Company has fled an application with the RBI to change the name in the Certifcate of Registration to IndoStar Capital Finance Private Limited on November 24, 2010, and the same is not received till the balance sheet date. The fnancial statements have been prepared in conformity with generally accepted accounting principles to comply in all material respects with the notifed Accounting Standards (AS) under Companies Accounting Standard Rules, 2006, as amended, the relevant provisions of the Companies Act, 1956 (the Act) and the guidelines issued by the Reserve Bank of India (RBI) as applicable to a Non Banking Finance Company (NBFC). The fnancial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained below.
(a) Change in accounting policy Presentation and disclosure of fnancial statements During the year ended March 31, 2012, the revised Schedule VI notifed under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its fnancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation and disclosures made in the fnancial statements. However, it has signifcant impact on presentation and disclosures made in the fnancial statements. The Company has also reclassifed the previous year fgures in accordance with the requirements applicable in the current year.
(b) Use of estimates The preparation of fnancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the fnancial statements and the results of operations during the reporting year end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognised prospectively in the current and future years.
(c) Tangible/Intangible Fixed Assets, Depreciation/Amortisation and Impairment Tangible Fixed Assets Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fxed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the year till such assets are ready to be put to use. 1 CORPORATE INFORMATION 2 BASIS OF PREPARATION 2.1 SIGNIFICANT ACCOUNTING POLICIES Annual Report 2011-12 14 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Depreciation on tangible fxed assets Depreciation is provided on Straight Line Method (SLM), which refect the managements estimate of the useful lives of the respective fxed assets and are greater than and equal to the corresponding rates prescribed in Schedule XIV of the Act. The assets for which higher rates used are as follows: Particulars Rates (SLM) Schedule XIV rates (SLM) Furniture and Fixtures 20% 6.33% Offce Equipments 20% 4.75% Computers 16.21% 16.21%
Leasehold improvement is amortised on Straight Line Method over the lease term.
All fxed assets individually costing ! 5,000/- or less are fully depreciated in the year of installation. Depreciation on assets acquired/sold during the year is recognised on a pro-rata basis to the Statement of proft and loss till the date of sale. Amortisation on assets acquired/sold during the year is recognised on a pro-rata basis to the Statement of proft and loss account till the date of sale.
Impairment of assets The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use, the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and risks specifc to the asset. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. (d) Investments Investments intended to be held for not more than a year are classifed as current investments. All other investments are classifed as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.Commerical papers are valued at carrying cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments. 18 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 (e) Provisioning / Write-off of assets Non performing loans are written off / provided for, as per management estimates, subject to the minimum provision required as per Non- Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.
Provision on standard assets is made as per the notifcation DNBS.PD.CC.No.207/ 03.02.002 /2010-11 issued by Reserve Bank of India. (f) Loans Loans are stated at the amount advanced and expenses recoverable, as reduced by the amounts received up to the balance sheet date. (g) Leases Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefts of ownership of the leased term, are classifed as operating leases. Operating lease payments are recognised as an expense in the Statement of proft and loss account on a straight-line basis over the lease term. (h) Foreign currency translation Initial recognition Transactions in foreign currency entered into during the year are recorded at the exchange rates prevailing on the date of the transaction. Conversion Monetary assets and liabilities denominated in foreign currency are translated in to Rupees at exchange rate prevailing on the date of the Balance Sheet. Exchange differences All exchange differences are dealt with in the Statement of proft and loss account.
(i) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefts will fow to the Company and the revenue can be reliably measured. i. Income from fnancing activities is recognised on accural basis. ii Income from services is recognised as per the terms of the contract on an accrual basis. iii Interest income on fxed deposits, certifcate of deposits, debentures and commercial papers is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Discount, if any, is recognised on a time proportion basis over the tenure of the securities. iv. Dividend is recognised as income when right to receive payment is established by the date of balance sheet. v. Proft/loss on the sale of investments is determined on the basis of the weighted average cost method. vi. Syndication & Origination fee is accounted for as income when a signifcant portion of the arrangement/syndication is completed. Annual Report 2011-12 19 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 vii. Interest income on loan portfolio buyout is recognised on accural basis at the agreed rate of interest on the diminishing balance of outstanding loan. (j) Retirement and other employee benefts Provident Fund All the employees of the Company are entitled to receive benefts under the Provident Fund, a defned contribution plan in which both the employee and the Company contribute monthly at a stipulated rate. The Company has no liability for future Provident Fund benefts other than its annual contribution and recognises such contributions as an expense in the year it is incurred.
Gratuity The Company provides for the gratuity, a defned beneft retirement plan covering all employees. The plan provides for lump sum payments to employees upon death while in employment or on separation from employment after serving for the stipulated year mentioned under The Payment of Gratuity Act, 1972. The Company accounts for liability of future gratuity benefts based on an external actuarial valuation on projected unit credit method carried out for assessing liability as at the reporting date. Leave Encashment Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method as at the reporting date. Actuarial gains/losses are immediately taken to Statement of proft and loss account and are not deferred.
(k) Income tax Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes refects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised.
The carrying cost of the deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available against which deferred tax asset can be realised. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available. 2" IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 (l) Segment reporting policies The Company is engaged in loan / fnancing activities. It operates in a single business and geographical segment. Of the total income ! 38,32,19,328/- includes income from deployment of surplus funds pending usage in fnancing activities.
(m) Earnings per share Basic earnings per share is calculated by dividing the net proft or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. (n) Provisions A provision is recognised when the Company has a present obligation as a result of past event; it is probable that outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refect the current best estimates. (o) Cash and cash equivalents Cash and cash equivalents in the cash fow statement comprise cash at bank and in hand, cheques on hand, remittances in transit and short term investments with an original maturity of three months or less. (p) Equity share expenses Issue expenses incurred on issue of equity shares are charged in the year expenses are incurred. (q) Borrowing costs Borrowing cost includes interest and are charged to Proft & Loss in the year in which they are incurred. (r) Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confrmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outfow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the fnancial statements. Annual Report 2011-12 2/ Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 3 SHARE CAPITAL Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 AUTHORISED 80,000,000 (March 31, 2011: 7,50,00,000 ) Equity Shares of ! 10/- each 800,000,000 750,000,000 800,000,000 750,000,000 ISSUED & SUBSCRIBED EQUITY SHARES 6,86,19,947 (March 31, 2011: 5,12,16,749) equity shares of ! 10/- each fully paid up 686,199,470 512,167,490 Less: 2,11,538 shares (March 31, 2011: Nil) equity shares of ! 10/- each fully paid up issued to employees through IndoStar trust (2,115,380) - 90,38,250 (March 31, 2011: 90,38,250 ) equity shares of ! 10/- each ! 0.01 paid up per share 90,383 90,383 TOTAL 684,174,473 512,257,873 a. Reconciliation of the equity shares outstanding at the beginning and at end of reporting period. As at March 31, 2012 As at March 31, 2011 Particulars Numbers of shares Amount in ! Numbers of shares Amount in ! Shares outstanding at the beginning of the year 60,254,999 512,257,873 212,180 2,121,800 Issued during the period 17,403,198 171,916,600 60,042,819 510,136,073 Shares outstanding at the end of the year 77,658,197 684,174,473 60,254,999 512,257,873 b. Terms/rights attached to equity shares The Company has only one class of equity shares having a par value of ! 10 per share. Each holder of equity shares is entitled to propotionate vote on basis of his contribution to fully paid up share capital. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the propotionate amount of contribution made by the equity shareholder to the total equity share capital. c. Details of shareholders holding more than 5% shares in the Company As at March 31, 2012 As at March 31, 2011 Name of the shareholders No. of Shares % holding in the class No. of Shares % holding in the class Equity shares of ! 10/- each IndoStar Capital (Mauritius) (Holding Company) 68,035,332 87.61 50,862,903 84.41 Sandeep Baid 3,792,223 4.88 3,686,133 6.12 Sanjay Hinduja 3,792,223 4.88 3,686,133 6.12 As per records of the Company, including its register of shareholders/members, the above shareholding represents legal ownerships of shares. 20 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 4 RESERVES AND SURPLUS Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 SECURITIES PREMIUM ACCOUNT Balance as per last account 6,138,744,480 18,196,200 Add: addition on issue of equity shares 2,088,383,788 6,120,548,280 Less: Premium on equity shares issued to employees through IndoStar Trust (25,384,620) - CLOSING BALANCE 8,201,743,648 6,138,744,480 OTHER RESERVES Statutory reserve pursuant to Section 45-IC of The RBI Act, 1934 Balance as per last account 2,871 2,871 Add: Transfer from Statement of proft and loss 106,421,332 - CLOSING BALANCE 106,424,203 2,871 SURPLUS IN STATEMENT OF PROFIT AND LOSS Balance as per last account (71,858,971) 11,486 Add: Proft / (Loss) for the current year 532,106,662 (71,870,457) Less: Appropriations Transfer to statutory reserve as per Section 45-IC of The RBI Act, 1934 (106,421,332) - TOTAL APPROPRIATIONS (106,421,332) - NET SURPLUS / (DEFICIT) IN THE STATEMENT OF PROFIT AND LOSS 353,826,359 (71,858,971) TOTAL RESERVES AND SURPLUS 8,661,994,210 6,066,888,380 5 OTHER LIABILITIES Amount in ! As at March 31, 2012 As at March 31, 2011 Particulars Long term Current Long term Current Deposits from clients 23,400,000 - - - Income received in advance 8,671,804 12,678,334 - - TDS payable - 3,601,759 - 9,047,857 Staturtory liabilities payable - 253,129 - - 32,071,804 16,533,222 - 9,047,857 Annual Report 2011-12 2! Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 6 PROVISIONS Amount in ! As at March 31, 2012 As at March 31, 2011 Particulars Long term Short term Long term Short term FOR EMPLOYEE BENEFIT For gratuity 879,819 39,071 500,000 - For leave encashment and availment - 622,227 - 102,191 FOR OTHERS For standard assets [Refer note 1(e) of Note 2.1] 54,037,499 32,242,671 - - For income tax 10,093,601 - - - [net of advance tax ! 8,35,84,410 (March 31, 2011: ! Nil)] 65,010,919 32,903,969 500,000 102,191 7 SHORT TERM BORROWING Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 UNSECURED LOAN Commercial papers - other than banks 1,000,000,000 - Less: Unamortised discount (6,656,573) - 993,343,427 - 993,343,427 - 8 FIXED ASSETS Amount in ! Tangible Assets Particulars Computers Offce Equipment Furniture and Fixtures Leasehold Improvement Total Tangible As- sets GROSS BLOCK As at April 1, 2010 - - Additions 46,000 46,000 Deletions As at March 31, 2011 46,000 - - 46,000 Additions 4,059,875 1,488,827 2,792,684 13,457,589 21,798,975 Deletions 10,600 10,600 As at March 31, 2012 4,059,875 1,524,227 2,792,684 13,457,589 21,834,375 21 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Amount in ! Tangible Assets Particulars Computers Offce Equipment Furniture and Fixtures Leasehold Improvement Total Tangible As- sets DEPRECIATION As at April 1, 2010 - - Additions 802 802 Deletions As at March 31, 2011 802 802 Additions 248,994 140,679 199,713 1,484,931 2,074,317 Deletions 6 6 As at March 31, 2012 248,994 141,475 199,713 1,484,931 2,075,113 NET BLOCK As at March 31, 2011 - 45,198 - - 45,198 As at March 31, 2012 3,810,881 1,382,752 2,592,971 11,972,658 19,759,262 9 DEFERRED TAX ASSETS (NET) Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 DEFERRED TAX ASSET Provision for standard assets 27,993,601 - Origination fees amortised 6,927,052 - Provision for gratuity 298,134 - Provision for leave encashment 168,725 - Dimunition in value of investments 625,783 - GROSS DEFERRED TAX ASSET (A) 36,013,295 - DEFERRED TAX LIABILITY Fixed asset: Impact of difference between tax depreciation and depreciation charged for Statutory fnancial statement (120,231) - GROSS DEFERRED TAX LIABILITY (B) (120,231) - Net deferred tax asset (A-B) 35,893,065 - Annual Report 2011-12 22 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 10 LOANS AND ADVANCES Amount in ! As at March 31, 2012 As at March 31, 2011 Particulars Non Current portion Current portion Non Current portion Current portion UNSECURED, CONSIDERED GOOD SECURITY DEPOSITS Unsecured, considered good 4,591,048 - - - SECURED, CONSIDERED GOOD Hypothecation loans 5,412,696,605 1,395,362,203 - - Debentures 37,500,000 1,841,962,620 - - UNSECURED, CONSIDERED GOOD Loan to IndoStar Trust 11,250,000 3,750,000 - - UNSECURED, CONSIDERED GOOD Advances recoverable in cash or in kind or for value to be received - 2,056,177 - 5,598 Prepaid expenses - 2,484,504 - - Service Tax (Input Credit) - 19,481 - - OTHER LOANS AND ADVANCES -UNSECURED, CONSIDERED GOOD Advance income tax (net of provision for taxation of !NIL (March 2011: NIL) - - 21,581 - 5,466,037,653 3,245,634,985 21,581 5,598 11 OTHER ASSETS Amount in ! As at March 31, 2012 As at March 31, 2011 Particulars Non Current portion Current portion Non Current portion Current portion Interest accrued on investments - 6,128,758 - - Interest accrued but not due on loans - 30,035,094 - - Interest accrued on fxed deposits with banks - 2,128,415 - 1,615,069 - 38,292,267 - 1,615,069 23 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 12 CURRENT INVESTMENTS Amount in ! Particulars Face value Quantity As at March 31, 2012 Quantity As at March 31, 2011 Amount As at March 31, 2012 Amount As at March 31, 2011 At Cost or fair value which- ever is lower A) QUOTED: INVESTMENT IN DEBENTURES 9.25% Power Grid Corpora- tion of India Limited 2022
1,250,000 40 - 50,058,750 - 9.25% Power Grid Corpora- tion of India Limited 2023
1,250,000 40 - 49,875,000 - (At cost less provision for diminution in value of ! 1,89,000 ) 9.25% Power Grid Corpora- tion of India Limited 2024
1,250,000 40 - 49,643,500 - (At cost less provision for diminution in value of ! 4,21,100 ) 9.25% Power Grid Corpora- tion of India Limited2025
1,250,000 40 - 49,554,100 - (At cost less provision for diminution in value of ! 5,14,900) 9.25% Power Grid Corpora- tion of India Limited 2026
1,250,000 40 - 49,269,250 - (At cost less provision for diminution in value of ! 8,03,750 ) B) INVESTMENT IN COM- MERCIAL PAPERS - UN- QUOTED Hindustan Petroleum Corporation Limited 500,000 1,000 - 496,121,983 - India Infoline Finance Limited 500,000 1,000 - 496,118,452 - C) INVESTMENT IN MUTUAL FUNDS - UNQUOTED Annual Report 2011-12 24 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Amount in ! Particulars Face value Quantity As at March 31, 2012 Quantity As at March 31, 2011 Amount As at March 31, 2012 Amount As at March 31, 2011 Reliance Liquid Fund -Treas- ury Plan 10 3,271,442.717 50,011,853 HDFC Cash Management Fund 10 - 9,407.512 - 100,062 ICICI Prudential Liquid Plan 10 - 844.128 - 100,041 Reliance Liquid Fund 10 - 6,563.138 - 100,041 SBI SHF Ultra Short Term Fund 10 - 76,776.123 - 768,222 UTI Liquid Cash Plan 10 - 93.246 - 100,057 1,290,652,888 1,168,423 Aggregate Value of Quoted Investments Cost of acquisition 250,329,350 - Market Value 248,400,600 - Aggregate Value of Unquoted Investments Cost of acquisition 1,042,252,288 1,168,423 Aggregate Provision for diminution in value of invest- ments 1,928,750 13 CASH AND BANK BALANCES Amount in ! As at March 31, 2012 As at March 31, 2011 Particulars Non Current portion Current portion Non Current portion Current portion CASH AND CASH EQUIVALENTS i) Balances with scheduled banks in: Current accounts - 22,740,589 - 63,389,784 Deposits with orginal maturity of less than three months - 425,000,000 - 6,550,000,000 ii) Cash on hand - 4,060 - 25,317 - 447,744,649 - 6,613,415,101 28 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 14 REVENUE FROM OPERATIONS Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 INTEREST INCOME ON: - loan portfolio and related charges 340,656,044 - - deposits with banks 81,517,280 1,838,274 - current investments 29,867,295 - OTHER FINANCIAL SERVICES: - origination fees 75,324,862 - - syndication & sell down fees 17,800,000 - - proft on sale of current investments (net) 1,620,134 - - dividend on current investments 351,731,899 457,485 898,517,514 2,295,759 15 OTHER INCOME Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Miscellaneous income 1,093 1,093 - 16 EMPLOYEE BENEFIT EXPENSES Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Salaries, other allowances and bonus 146,162,802 46,306,068 Gratuity expenses 418,890 500,000 Leave encashment 520,035 - Contribution to provident and other funds 1,674,075 - Staff welfare expenses 960,735 25,000 149,736,537 46,831,068 Annual Report 2011-12 29 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 17 FINANCE COST Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 INTEREST EXPENSE Deposits from clients 711,974 - Commercial paper 1,252,677 - 1,964,651 - 18 OTHER EXPENSES Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Rent 5,936,911 33,090 Repairs & maintenance 264,703 22,570 Rates & taxes 683,821 3,667,924 Rating fees 1,007,028 - Printing & stationery 347,916 16,456 Travelling & conveyance 2,779,568 506,571 Business meeting 300,902 30,453 Business promotion 100,593 14,263 Conference charges 696,337 217,051 Commission & brokerage 57,500 - Offce expenses 21,590,604 20,000,000 Directors' sitting fees 310,000 - Insurance 886,781 - Communication expenses 659,755 35,138 Payment to auditor - Audit fees 682,500 165,450 - Tax audit fees 157,500 - - Professional fees 367,500 - - Out of pocket 5,862 - Bank charges 37,315 2,597 Legal & professional charges 29,640,864 2,529,980 Loss on sale of fxed assets (net) 10,594 - Membership & subscribtions 116,837 22,060 Miscellaneous expenses 1,184 24,050 66,642,575 27,287,653 3" IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 19 PROVISIONS Amount in ! Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Provision for standard assets [Refer note (e) of Note 2.1] 86,280,170 - Provision for diminution in value of investments 1,928,750 - 88,208,920 - 20 EARNINGS PER SHARE Amount in ! except for no. of equity shares Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Net Proft / (Loss) after tax as per proft and loss account Amount in ! (A) 532,106,662 (71,870,457) Weighted average number of equity shares for calculating Basic EPS (B) 64,744,244 351,943 Weighted average number of equity shares for calculating Diluted EPS (C) 64,744,244 351,943 Basic earnings per equity share (in !) (Face value of ! 10/- per share) (A) / (B) 8.22 (204.21) Diluted earnings per equity share (in !) (Face value of ! 10/- per share) (A) / (C) 8.22 (204.21) Particulars For the year ended March 31, 2012 For the year ended March 31, 2011 Weighted average number of equity shares for calculating Basic / Diluted EPS 64,744,244 351,943 21 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS: The Company has an unfunded defned beneft gratuity plan. Every employee who has completed fve years or more of service is eligible for a gratuity on separation at 15 days basic salary (last drawn salary) for each completed year of service.
Annual Report 2011-12 3/ Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Consequent to the adoption of revised AS 15 Employee Benefts issued under Companies Accounting Standard Rules, 2006, as amended, the following disclosures have been made as required by the standard: Proft and loss account Net employee beneft expense (recognised in employee cost) Amount in ! Particulars March 31, 2012 March 31, 2011 Current service cost 804,562 452,620 Interest cost on beneft obligation 43,500 - Expected return on plan assets Net actuarial (gain) / loss recognised in the year (429,171) (452,620) Past service cost Net beneft expense 418,891 - Balance sheet Details of Provision for gratuity Amount in ! Particulars March 31, 2012 March 31, 2011 Defned beneft obligation 918,891 - Fair value of plan assets - - Less: Unrecognised past service cost - - Plan asset / (liability) 918,891 - Changes in the present value of the defned beneft obligation are as follows: Amount in ! Particulars March 31, 2012 March 31, 2011 Opening defned beneft obligation 500,000 - Interest cost 43,500 - Current service cost 804,562 452,620 Benefts paid - - Actuarial (gains) / losses on obligation (429,171) (452,620) Closing defned beneft obligation 918,891 - 30 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 The Company would not contribute any amount to gratuity in 2011-12 as the scheme is unfunded. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: Amount in ! Particulars March 31, 2012 March 31, 2011 Investments with insurer - - The principal assumptions used in determining gratuity obligations for the Companys plan are shown below: Amount in ! Particulars March 31, 2012 March 31, 2011 Discount Rate 8.70% 8.00% Increase in compensation cost 6.00% 6.00% Employee Turnover* The estimates of future salary increases, considered in actuarial valuation, are on account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. *5% at younger ages reducing to 1% at older ages. Amounts for the Current and previous four years are as follows: Amount in ! Particulars March 31, 2012 March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008 Defned beneft obligation 918,890 - - - - Plan assets - - - - - Surplus / (defcit) (918,890) - - - - Experience adjustments on plan liabilities (429,171) (452,620) - - - Experience adjustments on plan assets - - - - - Annual Report 2011-12 3! Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 22 RELATED PARTY DISCLOSURE Holding Company IndoStar Capital (Mauritus) Key Managerial Personnel Vimal Bhandari - MD & CEO Sanjay Hinduja - Wholetime Director Sandeep Baid - Wholetime Director Pankaj Thapar* - Director Dhanpal Jhaveri - Director Relatives of Key Managerial Personnel None * Till April 28, 2011 - No transactions for the said period being reported.
I Transaction details Amount in ! Name of related party & nature of relationship Particulars As at March 31, 2012 As at March 31, 2011 HOLDING COMPANY IndoStar Capital (Mauritius) Investment in share capital 171,724,290 508,629,030 Securities premium 2,060,691,480 6,103,548,360 KEY MANAGERIAL PERSONNEL Vimal Bhandari Investment in share capital 2,307,690 - Securities premium 27,692,280 - Remuneration paid 28,847,071 - Expenses reimbursed 493,873 - Sanjay Hinduja Investment in share capital - 744,483 Securities premium - 8,499,960 Remuneration paid 21,802,609 - Expenses reimbursed 268,631 - Sandeep Baid Investment in share capital - 744,483 Securities premium - 8,499,960 Remuneration paid 25,216,735 - Expenses reimbursed 24,478 - Pankaj Thapar Expenses reimbursed - 1,140 Dhanpal Jhaveri Expenses reimbursed - 4,703
31 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 II Balance as at year end Amount in ! Name of related party & nature of relationship Particulars As at March 31, 2012 As at March 31, 2011 HOLDING COMPANY IndoStar Capital (Mauritius) Investment in share capital 680,353,320 508,629,030 Securities premium 8,164,239,840 6,103,548,360 KEY MANAGERIAL PERSONNEL Vimal Bhandari Investment in share capital 2,314,552 - Securities premium 27,692,280 - Payable 6,000 - Sanjay Hinduja Investment in share capital 1,805,383 744,483 Securities premium 8,499,960 8,499,960 Sandeep Baid Investment in share capital 1,805,383 744,483 Securities premium 8,499,960 8,499,960
23 CONTINGENT LIABILITIES Amount in ! Commitments not provided for As at March 31, 2012 As at March 31, 2011 Estimated amount of contracts remaining to be executed on capital account 2,641,926 - 24 LEASES In case of assets taken on lease The Company has taken various offce premises under operating lease. The lease payments recognised in the statement of proft & loss are ! 59,36,911 (March 31, 2011: ! 33,090). The non-cancellable operating lease agree- ments are for a period of 36 months. There are no restrictions imposed by lease arrangements. There are no sub leases. The future minimum lease payments in respect of non-cancellable operating lease as at the balance sheet date are summarised below : Amount in ! Particulars Minimum Lease Payments: As at March 31, 2012 As at March 31, 2011 Not later than one year 16,541,844 - Later than one year but not later than fve years 27,569,740 - Later than fve years - - Annual Report 2011-12 32 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 25 DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES AS PER MSMED ACT, 2006 Based on the intimation received by the Company, some of the suppliers have confrmed to be registered under The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Accordingly, the disclosures relating to amounts unpaid as at the year ended together with interest paid /payable are furnished below: Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 The principal amount remaining unpaid to supplier as at the end of the year - - The interest due thereon remaining unpaid to supplier as as the end of the year - - The amount of interest paid in terms of Section 16, along with the amount of payment made to the supplier beyond the appoint- ment day during the year - - The amount of interest due and payable for the year of delay in making payment (which have been paid but beyond the appoint- ed day during the year) but without adding the interest specifed under this Act - - The amount of interest accrued during the year and remaining unpaid at the end of the year - - The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006 - - 26 CAPITAL TO RISK ASSETS RATIO DISCLOSURE Amount in ! Particulars As at March 31, 2012 As at March 31, 2011 (i) CRAR (%) 85.83 232,061.28 (ii) CRAR Tier I capital (%) 85.04 232,061.28 (iii) CRAR Tier II capital (%) 0.79 - 33 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 2 7
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Annual Report 2011-12 34 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 As per our report of even date For S R B C & Co. Firm Registration No. 324982E Chartered Accountants For and on behalf of the Board of Directors of IndoStar Capital Finance Private Limited per Shrawan Jalan Partner Membership No. 102102 Vimal Bhandari MD and CEO Dhanpal Jhaveri Director Pankaj Thapar Chief Financial Offcer Place : Mumbai Date : June 20, 2012 Jitendra Bhati Company Secretary 28 EXPOSURE TO REAL ESTATE SECTOR Amount in ! Category As at March 31, 2012 As at March 31, 2011 A DIRECT EXPOSURE i. Residential Mortgages - - Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented; (Individual housing loans up to !15 Lacs may be shown separately) - ii. Commercial Real Estate Lending secured by mortgages on commercial real estates (offce buildings, retail space, multipurpose commercial premises, multi- family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, develop- ment and construction, etc.). 1,605,166,465 - Exposure would also include non-fund based (NFB) limits; - Investments in Mortgage Backed Securities (MBS) and other securitised exposures Nil - - Residential Nil - - Commercial Real Estate Nil - B INDIRECT EXPOSURE Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs) Nil - Previous year / periods fgures have been regrouped / rearranged, wherever considered necessary, to conform with Current year / periods presentation. 38 IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 AS REQUIRED IN TERMS OF PARAGRAPH 13 OF NON-BANKING FINANCIAL (NON- DEPOSIT ACCEPTING OR HOLDING) COMPANIES PRUDENTIAL NORMS (RESERVE BANK) DIRECTIONS, 2007 Amount in ! Particulars As at March 31, 2012 LIABILITIES SIDE : (1) Loans and advances availed by the NBFCs inclusive of interest accrued thereon but not paid: Amount outstanding Amount overdue (a) Debenture : Secured : Unsecured - - (b) Deferred Credits - - (c) Term Loans - - (d) Inter-corporate loans and borrowing - - (e) Commercial Paper 993,343,427 - (f) Public Deposits (Refer Note 1 below) - - (g) Other Loans - - (2) Break-up of (1)(f) above (Outstanding public deposits inclusive of interest accrued thereon but not paid): Amount outstanding Amount overdue (a) In the form of Unsecured debentures - - (b) In the form of partly secured debentures i.e debentures where there is a shortfall in the value of security - - (c) Other public deposits - - ASSETS SIDE : Amount outstanding (3) Break-up of Loans and Advances including bills receivables (other than those included in (4) below ): (a) Secured 8,687,521,429 (b) Unsecured 15,000,000 (4) Break up of Leased Assets and stock on hire counting towards AFC activities Amount outstanding (i) Lease assets including lease rentals under sundry debtors : - - (a) Financial lease - - (b) Operating lease - - (ii) Stock on Hire including hire charges under sundry debtors : - - (a) Assets on hire - - (b) Repossessed Assets - - Annual Report 2011-12 39 Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Amount in ! Particulars As at March 31, 2012 (iii) Other loans counting towards AFC Activities : - - (a) Loans where assets have been repossessed - - (b) Loans other than (a) above - - (5) Break-up of Investments : Amount outstanding Current Investments : 1. Quoted : (i) Shares : (a) Equity - - (b) Preference - - (ii) Debenture and Bonds 248,400,600 (iii) Units of mutual funds - - (iv) Government Securities - - (v) Others (Please specify) - - 2. Unquoted : (i) Shares: (a) Equity - - (b) Preference - - (ii) Debentures and Bonds - - (iii) Units of mutual funds 50,011,853 (iv) Government Securities - - (v) Others: Commercial papers 992,240,435 Long Term investments : 1. Quoted : (i) Shares : (a) Equity - - (b) Preference - - (ii) Debentures and Bonds - - (iii) Units of mutual funds - - (iv) Government Securities - - (v) Others (Please specify) - - 2. Unquoted : (i) Shares: (a) Equity - - (b) Preference - - (ii) Debentures and Bonds - - (iii) Units of mutual funds - - (iv) Government Securities - - (v) Others - - 4" IndoStar Capital Finance Private Limited J)(&* forming part of the fnancial statements for the year ended March 31, 2012 Amount in ! Particulars As at March 31, 2012 (6) Borrower group-wise classifcation of as- sets, fnanced as in (3) and (4) above : Please see Note 2 below Category Amount in !( Net of provisions ) Secured Unsecured Total 1. Related Parties ** (a) Subsidiaries - - - (b) Companies in the same group - - - (c) Other related parties - - - 2. Other than related parties 8,687,521,429 15,000,000 8,702,521,429 (7) Investor group-wise classifcation of all investments (current and long term) in shares and securities (both quoted and unquoted): Please see note 3 below Amount in ! Category Market Value / Break up or fair value or NAV* Book Value (Net of Provisions) 1. Related Parties ** (a) Subsidiaries - - (b) Companies in the same group - - (c) Other related parties - - 2. Other than related parties 1,290,652,888 1,290,652,888 Annual Report 2011-12 4/ Corporate Overview Board and Management Reports Financial Statements J)(&* forming part of the fnancial statements for the year ended March 31, 2012 (8) Other information Particulars Amount in ! (i) Gross Non-Performing Assets (a) Related parties** - (b) Other than related parties - (ii) Net Non-Performing Assets (a) Related parties** - (b) Other than related parties - (iii) Assets acquired in satisfaction of debt - Notes : 1. As defned in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. 2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. 3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for calculation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classifed as long term or current in column (5) above.
40 IndoStar Capital Finance Private Limited Information pursuant to Part IV of Schedule VI of the Companies Act, 1956 BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE I. REGISTRATION DETAILS Registration no. U51909WB2009PTC136998 State code no. 21 Balance Sheet date 31-Mar-12 II. CAPITAL RAISED DURING THE YEAR (Amounts in ! Thousands) Public issue (issue through the prospectus) Nil Right issue Nil Bonus issue Nil Private placement 2,262,416 III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amounts in ! Thousands) Total liabilities (including current liabilities and provisions) 10,544,015 Total assets (excluding current liabilities and provisions) 10,544,015 Sources of Funds : Paid-up capital 684,174 Reserves and surplus 8,661,994 Secured loans Nil Unsecured loans 993,343 Deferred tax liability Nil Application of Funds : Net fxed assets 19,759 Investments 1,290,653 Deferred tax asset 35,893 Net current assets 8,993,207 Miscellaneous expenditure Nil IV. PERFORMANCE OF COMPANY (Amounts in ! Thousands) Turnover 898,519 Total expenditure 308,627 Proft before tax 589,892 Proft/(Loss) after tax 532,107 Basic and diluted earning per share in ! 8.22 Dividend rate in % Nil V GENERIC NAME OF PRINCIPAL PRODUCT/ SERVICES OF COMPANY ( As per monetary terms ) Item code no. 801 Product description Non-Banking Financial Business (NBFC- LENDING ACTIVITY) For and on behalf of the Board of Directors of IndoStar Capital Finance Private Limited Vimal Bhandari MD and CEO Dhanpal Jhaveri Director Place : Mumbai Date : June 20, 2012 Jitendra Bhati Company Secretary BOARD OF DIRECTORS Managing Director & CEO Mr. Vimal Bhandari Executive Directors Mr. Sanjay Hinduja Mr. Sandeep Baid Non-Executive Directors Mr. Sameer Sain Mr. Atul Kapur Mr. Dhanpal Jhaveri Mr. Rajesh Mehta Mr. Deepak Shahdadpuri Mr. Alok Oberoi Ms. Shweta Bhatia Non-Executive Independent Directors Mr. Eric Stuart Schwartz Mr. Bobby Parikh CHIEF FINANCIAL OFFICER Mr. Pankaj Thapar COMPANY SECRETARY Mr. Jitendra Bhati STATUTORY AUDITORS S R B C & Co. Chartered Accountants INTERNAL AUDITORS Deloitte Haskins & Sells Chartered Accountants BANKERS Axis Bank Limited HDFC Bank Limited ICICI Bank Limited IDBI Bank Limited IndusInd Bank Limited Kotak Mahindra Bank Limited State Bank of India Yes Bank Limited SECURITY TRUSTEE IDBI Trusteeship Services Limited Asian Building, Ground Floor 17, R Kamani Marg, Ballard Estate Mumbai - 400 001 REGISTRAR & SHARE TRANSFER AGENTS Link Intime India Private Limited C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai - 400 078 REGISTERED OFFICE Room No. 6, 4th Floor, Commerce House, 2A, Ganesh Chandra Avenue Kolkata 700 013 CORPORATE OFFICE One Indiabulls Center, 17th Floor, Tower 2A, Jupiter Mills Compound Senapati Bapat Marg, Mumbai - 400 013 Tel No. : +91 22 4315 7000 Fax No.: +91 22 4315 7010 E-mail : icf.legal@indostarcapital.com Website : www.indostarcapital.com !/0'/0123 567/08125/6 REGISTERED OFFICE Room No. 6, 4th Floor, Commerce House, 2A, Ganesh Chandra Avenue Kolkata 700 013 CORPORATE OFFICE One Indiabulls Center, 17th Floor, Tower 2A, Jupiter Mills Compound Senapati Bapat Marg, Mumbai - 400 013 Tel No. : +91 22 4315 7000 Fax No. : +91 22 4315 7010 E-mail : icf.legal@indostarcapital.com Website : www.indostarcapital.com